Wednesday, May 4, 2011

A Universal Declaration on Monetary Justice

As frequently happens, we interrupt our regularly scheduled broadcast to bring you this important news bulletin. We've made some changes in the Declaration of Monetary Justice we deliver to the Chairman of the Federal Reserve System each year, and we've also done a little bit of touch-up on a petition drawn up by Our Gallant Man in London, Pollant "PJ" Mpofu. We'll wait and see if PJ wants us to post the petition after he publishes it (it would a bit of a dirty trick to publish PJ's petition before he has a chance, don't you think?), but we can give you the Declaration today . . . so we will. (FYI: CESJ and the Coalition for Capital Homesteading are two discrete organizations . . . you knew that, didn't you?)

Whereas, the global economy is today plagued by a growing gap between the rich and the non-rich; by a recession and credit crisis; by debilitating waste and under-employment of human talent; by inadequate growth alongside shackled technological potential; by record-level trade and governmental budget deficits; and by promises of future welfare and benefit payments that dwarf the capacity of any nation to redeem; and

Whereas, the sustainable growth and energy self-sufficiency of the global economy in the Twenty-First Century will require vast amounts of financing each year for new and improved, life-enhancing technologies, rentable space and physical infrastructure for producing marketable goods and services; and

Whereas, broad-based direct ownership of the means of production has been recognized by moral leaders for millennia as the only truly sound and sustainable basis of a just economic order; and

Whereas, Section 17 of the Universal Declaration of Human Rights has declared that "Everyone has the right to own property, individually as well as in association with others," a fundamental human right that remains an empty and unfulfilled promise for most citizens, especially the poor, within every nation in the world; and

Whereas, the goal of universal and equal economic opportunity has been blocked by artificial investment, monetary, credit and tax barriers to widespread capital ownership, to the advantage only of the wealthiest people or the State; and

Whereas, the central banks of the world have stifled the growth of the world's productive capacity through their monetary policy, by monetizing public-sector growth and mounting government deficits and bailouts of failed companies and stock market, currency and commodity gamblers; by favoring speculation over investment; by shortchanging the capital credit needs of entrepreneurs, inventors, farmers, workers and citizens generally; by increasing the dependency of families by burdening them with usurious consumer credit; and by perpetuating unjust capital credit and ownership barriers between rich people and those without savings; and

Whereas, there is a fundamental difference between asset-backed self-liquidating credit for productive uses and debt-backed non-self-liquidating credit for non-productive uses, consumption or speculation, the first being critical for stimulating private sector investment, savings and the supply of new marketable wealth, and the second being used to give people an inflated currency to chase the same supply of existing wealth; and

Whereas, sound central banking theory is formulated in such a way as to discourage non-productive and speculative uses of credit, to encourage accelerated rates of private sector growth, and to allow and promote widespread individual access to productive credit as a fundamental right of citizenship;

Now, Therefore, Be It Resolved, that the legislators of each country of the world amend the charters of their respective central banks (1) to stop monetizing government debt through buying and selling government securities, (2) to begin implementing or re-activating the discount and rediscount mechanism to encourage private sector growth linked to expanded ownership opportunities for all people, and (3) to provide a no-cost, non-transferable, voting, lifetime ownership share in the central bank to democratize money power to every citizen as a fundamental right of citizenship.

To This End, we hereby petition the governors of the world's central banks to adopt a two-tiered money-creation and credit policy that sharply distinguishes between ownership-expanding, productive credit, and ownership-concentrating, non-productive and speculative uses of credit. The upper tier, reflecting the higher market costs of borrowing "old money" from existing domestic and foreign savings pools and existing assets, should continue to be maintained as a source of market-rate credit to public-sector borrowers, consumers, speculators, and for all other non-productive or monopolistic purposes. The central bank discount rate for the lower tier should ideally be reduced to no higher than 0.5 percent as a one-time "service fee" for creating interest-free "new money" backed by sustainable, non-inflationary and broadly owned growth.

This new reservoir of central bank monetized credit should be reserved exclusively for commercial banks served by members of the central bank to the extent they in turn make available in equal periodic allotments to every citizen through "Capital Homestead Accounts" direct access to capital credit at reasonable service charges and risk premiums, with prime rates set by market forces above the discount rate to local commercial banks, with all government securities specifically disqualified from a central bank's discounting, rediscounting, or open market operations, except as required to divest a central bank of its existing holdings of such disqualified securities. Such expanded bank credit should not be subsidized by the taxpayers, and should be backed and collateralized by the newly acquired assets, claims on future earnings on such assets, and private sector capital credit insurance to cover the risk of default.

Such ownership-broadening capital credit borrowed through local banks at the lower tier rates could be invested directly to (1) for-profit citizen-owned Land and Natural Resource Banks organized for large-scale local land acquisition and development of surface and sub-surface rights, leasing to users of land and extraction rights, and infrastructural development in which every citizen has a single, lifetime, non-transferable, full-dividend payout, full voting share, or (2) tax-sheltered Capital Homestead Accounts to enable each citizen to invest in "qualified" securities, such as newly issued, full-dividend payout, full voting shares in a company for which a member of the citizen's household works; companies in which the citizen's household has a monthly billing account; Homeowners Equity Corporations for turning renters into owners; production and marketing cooperatives and partnerships; family-owned and -operated businesses and farms; and mature companies with a history of solid earnings; and

Be It Further Resolved, that a copy of this Universal Declaration of Monetary Justice be sent to the heads of State, members of the legislature, and the governing boards of the central banks of the world.